Tesla (TSLA) Stock Defies Gravity: Fourth Quarter Delivery Drop & European Sales Collapse Can’t Stop the Rally

Tesla's stock just pulled off a classic Wall Street magic trick—rising on what looks like bad news. The numbers tell one story, but the ticker tells another.

The Contradiction in the Data

Fourth-quarter deliveries took a hit. European sales? They cratered. By the old playbook, that's a sell signal. Yet, TSLA shares climbed. It's a reminder that market sentiment often operates on a different logic than quarterly reports—fueled by narrative, momentum, and a belief in the long-term disruption play.

Decoding the Market's Signal

This isn't just about cars. It's about Tesla's positioning as a tech and energy ecosystem. The market seems to be pricing in future capacity, software margins, and AI potential, looking past a single quarter's logistical snags or regional demand shifts. When you're valued as a tech company, traditional auto metrics sometimes get a pass.

The Bigger Picture

Every legacy automaker watching this must be grinding their teeth. A stumble that would tank their stock gets shrugged off for the EV pioneer. It highlights the immense premium placed on growth stories and first-mover advantage—even when the growth hiccups.

In the end, it's a masterclass in market psychology. Fundamentals whisper caution, but the crowd shouts conviction. Sometimes, the story is just too good to sell—after all, on Wall Street, a compelling narrative can be worth more than a perfect balance sheet, at least until the music stops.

TLDR

• Tesla delivered 418,227 vehicles in Q4 2025, slightly below Wall Street’s 423,000 estimate but within expected range
• Stock rose 2.1% to $459.33 following the delivery report despite the quarter-over-quarter decline
• European sales collapsed by 70% in key markets like France and Sweden, with market share dropping to 1.7%
• Tesla reported 52 million Q4 charging sessions, up 29% year-over-year
• Company targets February 2026 for Full Self-Driving launch in Europe pending regulatory approval

Tesla stock moved higher on Thursday despite reporting fourth quarter deliveries that fell short of expectations. The EV Maker delivered 418,227 vehicles in the period.

Tesla, Inc., TSLA

Wall Street analysts had predicted closer to 423,000 deliveries. Some recent estimates had dropped to around 415,000 vehicles.

The fourth quarter figure represents a decline from the third quarter’s 497,099 deliveries. That third quarter number was a company record.

Shares traded up 2.1% at $459.33 following the news. The market appeared relieved that deliveries didn’t miss by a wider margin.

The delivery drop wasn’t unexpected. The federal government ended the $7,500 EV tax credit in September.

That effectively raised prices for American buyers. It also created a rush to purchase vehicles in the third quarter before the credit expired.

Charging Network Shows Growth

Tesla shared some positive data before the delivery report. The company logged 52 million charging sessions in the fourth quarter.

That’s a 29% increase compared to the same period last year. The number suggests Tesla owners are driving their vehicles more frequently.

Tesla’s charging network also serves other EV brands. The growth in sessions reflects broader EV adoption beyond just Tesla vehicles.

Investor attention is now shifting to Tesla’s robotaxi business. The service launched in Austin with safety monitors in June.

CEO Elon Musk has hinted that safety monitors could be removed soon. That WOULD mark a key milestone for the autonomous driving program.

Europe Presents Major Challenge

While deliveries in the U.S. held relatively steady, Tesla faces a crisis in Europe. Sales in key markets like France and Sweden collapsed by 70%.

In France, Tesla registered just 1,942 cars in December. The company once led that market but now trails local brands and Chinese competitors like BYD.

Tesla’s market share across the EU and UK shrank from 2.4% to 1.7%. This happened while overall EV registrations in Europe climbed 27%.

Analysts point to two main problems. First, Tesla’s Model 3 and Model Y lineup is considered stale compared to newer alternatives.

Second, Musk’s public political positions have hurt the brand. Polls in Germany and the UK show his image has turned unfavorable with environmentally conscious buyers.

These customers traditionally formed Tesla’s Core European base. Many are switching to competitors instead.

Tesla recently introduced cheaper variants of its main models. The price cuts haven’t stopped the sales decline.

Some buyers are waiting for the rumored “Juniper” refresh of the Model Y. Others have already moved on to other brands.

The company is betting on software to fix the European problem. Tesla targets February 2026 for launching Full Self-Driving in Europe.

The strategy involves getting a national exemption from Dutch vehicle authority RDW. If approved, other European countries could follow quickly.

Tesla has logged over 1 million kilometers of testing across 17 European countries. But RDW recently clarified they’ve only agreed to a demonstration in February, not guaranteed approval.

The average price target sits at $394.07, implying 12.4% downside from current levels. Tesla’s market cap of $1.6 trillion values the company at 220 times estimated 2026 earnings.